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NEW ULM -- The Economic Development Authority took some major swings at their programs and overall focus for 2024 at their work session on Tuesday.
The EDA discussed five of its loan and grant programs during the meeting, aimed at improving the quality of apartments and small businesses.
The EDA's most popular program is its Small Business Grants. Currently, it is a first come first serve program offering $10,000 to businesses in their first year of operation. The EDA currently funds it at $50,000 per year.
City Manager Chris Dalton voiced his support for the program. He said the program is very popular, but demand is high.
"The issue we run into all the time is because it’s such a popular program, we’ve never had money in it," Dalton said. "It’s always gone, which is fine from our standpoint because the money is out there doing its thing."
Dalton suggested tweaking the program's numbers. Instead of a $10,000 cap and $50,000 of funding, he suggested lowering the cap to $7,500 and having $75,000 in funding. This would change the amount of possible max grants from five to 10. EDA member Les Schultz threw his support behind adding more money to the program.
"This program is truly economic development," he said. "They’re helping small businesses get up and running. I want to see us add more money to it and get more grants out there because we run out pretty early."
The board pitched several potential limits on who can get how much funding. This includes a lower cap on one-person businesses and prioritizing commercial businesses favorable to economic development like retail, restaurants, and childcare.
Housing Coordinator Heather Bregel said this would come at the expense of having more service businesses like insurance companies or therapists.
EDA member Char Kalk rebutted this point, stating service businesses are necessary to attract business owners to New Ulm. EDA member Lindsay Henn said there is already an abundance of therapists and hair salons. What they don't have enough of is childcare and retail, which are priorities for the EDA.
Focusing on this imbalance, EDA member Michelle Markgraf proposed radically changing the way the program is running.
"I want to go in a very different direction from how we’ve done this program in the past," she said. "We could do something where it becomes like a competitive grant. We'd have certain things like a daycare would score higher than an insurance company and have parameters around that. Maybe it’s just once or twice a year we open this up for bids."
Dalton said the scoring metric for this competition would need to be as impartial as possible to work. Decisions will need to have clear reasoning explainable to those who do not receive a grant.
EDA president Andrea Boettger said she was in favor of this potential direction, wanting to use the EDA's money in the strongest way possible. She advised bids to be chosen automatically based on who's highest on the scoring metric, with no discussion taking place to enhance impartiality.
"I think there’s a scoring model and we don’t sit and review all the submissions," Boettger said. "You put the parameters in place, and we don’t even talk about it. Because then you become more impartial."
The discussion then pivoted to the EDA's main focus for improvement in 2024. Kalk pointed to housing as an immediate concern. She contrasted Mankato's rapid growth in apartments with New Ulm having 57 people on the waiting list at one apartment complex due to lack of availability. Boettger said there is some development on the way with two well-known properties.
"We are getting started with somebody developing some apartments and mixed-use housing where George’s Ballroom is," she said. "Once one of those dominoes goes, the rest should fall. People are going to see it and it’s going to start to happen."
Dalton said part of the reason New Ulm struggles with attracting developers is the lack of a major off-campus student population. Boettger said the current housing need should be a big neon sign for developers as a money-making opportunity regardless.
Dalton said he doesn't disagree with this, but there have been several examples of developers not receiving support for their projects. He said the biggest issue is the difference between statistics saying there is support and the prohibitive cost of apartments.
Schultz suggested taking risks and being aggressive in solving the problem like they had when building Garden Terrace apartments and working on Westridge Place. Markgraf said there should be more caution in this situation, given the ongoing developments at George's Ballroom and Marktplatz mall. She said their focus should not fully pivot from daycare to housing.
"I don’t think we’re done with daycare," Markgraf said. "It’s not something where we can say 'Yep we got [Westridge Place], let’s move on to the next thing. We still need to focus on it and figure out what we’re going to do moving forward. We’ve got some momentum started but we have a lot more work to do in the area of daycare."
Schultz said a big difference between previous housing talks and now is the presence of a four-lane highway. He said developers had previously shied away from New Ulm because it lacked a connection to a four-lane highway. Schultz recommended pausing talks until the EDA could get more information on their industrial park area. The board agreed.
Since it was a work session, no official action was taken. The next EDA meeting is on Jan. 9, 2024, at 8 a.m.